Washington, D.C. March 19, 2021. Mr. Gary Gensler, President Biden’s nominee to be Chairman of the U.S. Securities and Exchange Commission (SEC), committed to strongly supporting whistleblowers who file cases under the Dodd-Frank Act’s whistleblower reward law. In a series of written answers to questions filed by Senator Chuck Grassley, Mr. Gensler stated: “If confirmed to lead the SEC, I will build on the work of past Chairs to ensure continued strength in the whistleblower program.”
Mr. Gensler’s answers to five questions submitted by Senator Grassley were obtained by Whistleblower Network News and are linked here.
“This is great news for whistleblowers,” said Stephen M. Kohn, Chairman of the Board of Directors of the National Whistleblower Center and a whistleblower attorney with the law firm of Kohn, Kohn and Colapinto. “Mr. Gensler’s answers are the strongest statements of support for whistleblowers ever given by an incoming SEC Chairman. They indicate that the SEC reward program will become even stronger under Gensler’s leadership,” Kohn added.
Kohn praised Mr. Gensler’s responses: “It is vitally important that the Chairman of the SEC sends the right message both to Wall Street and Commission staff. Whistleblowers need top level support when they risk their jobs to report securities frauds and foreign bribery,” Kohn said.
“We are especially pleased that Mr. Gensler voiced support for full funding for the SEC’s whistleblower program, along with other needed improvements. This support includes instituting procedures to ensure that whistleblower cases are timely decided. Currently, cases can be delayed for years due to bureaucratic and budgetary roadblocks,” according to Kohn, who represents numerous SEC whistleblowers.
In response to Senator Grassley’s questions, Mr. Gensler provided the following written commitments:
“If confirmed, I would want to work with you, your staff, fellow SEC commissioners and staff in the Office of the Whistleblower to examine whether and how the program could be strengthened to ensure that misconduct within the remit of the SEC is identified, addressed and stopped.”
“I share your goals of ensuring that whistleblowers are encouraged to come forward when they see misbehaviour, and that they be protected from retaliation.”
“If confirmed, I will work with fellow SEC commissioners and staff to request the resources necessary from congressional appropriators to ensure that the Office of the Whistleblower can fulfil its statutory mandates.”
“If confirmed, I commit to working with you and your staff to reduce processing times in SEC whistleblower award determinations.”
“I agree that awards should be granted in a timely manner, as whistleblowers often have to incur significant expenses and withstand significant uncertainty and distress when waiting for the SEC’s determinations.”
“Regarding the CFTC [Commodity Futures Trading Commission], I support legislation such as your CFTC Fund Management Act which could assist that agency in ensuring the sound operation of their whistleblower program.”
The Dodd-Frank Act permits Wall Street whistleblowers to confidentially and anonymously report violations of securities laws and the Foreign Corrupt Practices Act to the SEC. If a whistleblower’s original information results in a sanction, the whistleblower is entitled to a reward of between 10-30% of the collected proceeds. According to press releases issued by the SEC Office of the Whistleblower, since it was established in 2010, the SEC’s whistleblower law has collected well over $4.5 billion from fraudsters, paid over $750 million to harmed investors, and paid another $750 million in compensation to whistleblowers.
